## EIA: US summer gasoline demand expected to be at 11-year low, prices at record high

##### 26 April 2012

US gasoline demand this summer is expected to be the lowest in 11 years, while the average summer fuel price is forecast to be at a record level, according to the US Energy Information Administration (EIA). High prices at the pump—mostly a result of global crude oil prices—and the use of more efficient vehicles both encourage reduced gasoline consumption.

US gasoline consumption is forecast to average almost 8.8 million barrels per day (bbl/d) this summer driving season, which runs from April through September, the lowest since 2001 and about 6.4% less than 2007’s record summer gasoline demand of 9.4 million bbl/d, according to EIA’s 10 April 2012 Short-Term Energy Outlook (STEO). Data and projections from STEO are subject to change with the next release of the STEO on 8 May 2012.

Also, higher vehicle fuel efficiency should contribute to lower gasoline demand this summer. Higher gasoline prices, which are expected to be up an average of 24 cents per gallon this summer compared to last year, according to the April 2012 STEO, are also expected to reduce some highway travel, which will reduce fuel use.

### Comments

There is a limit to how high gas prices can go before investments can be made in alternatives at levels that would permanently damage the fossil energy market. Electric vehicles are very close to the economic break even point now, and in some cases they are there already, and the car companies aren't even producing at volume yet. I still continue to use $3.50 per gallon as my price point for gas when I do an analysis of cost of ownership for electric vehicles. I assume that spikes like we see in the summer are just temporary and that the fossil energy companies don't really want to give us incentives to finally get an alternative technology going that would replace them. I mean sure, they have a lot of loyal followers like any other cult of imaginary facts, but they are at risk. Some people think for themselves still. You know they don't really take to their training very well. They have already discovered the point at which consumers will actually make a change, and that is at about$4.00 per gallon, as witnessed by the fact that we actually have had some decreases in fuel usage lately (an unprecidented event that has never happened ever before). So, with battery prices coming down, and people beginning to understand that a tank of gas is more dangerous than a battery, I doubt the oil companies can have gasoline prices above $4.00 per gallon for any length of time. ".. I doubt the oil companies can have gasoline prices above$4.00 per gallon for any length of time."

Should the full cost of US oil include oil wars and match Europe's prices - $8.00 a gallon will be more typical. Once a nation distributed 30 lbs of uranium on another. Later, Deciders distributed 320,000 lb of uranium on a different nation. Should a few uranium IEDs go floating about the Straits of Hormuz -$10 a gallon will be cheap.

When gas goes to $10 a gallon you might not be able to afford to buy groceries even if you drive an electric vehicle. Happily there is still natural gas as an alternative, the Spinach Party not withstanding. There's a price point where the railroads will switch fuels. Switch to what is the big question; LNG is a possibility, but if the RRs can get tax exemptions for the capital improvements they may just electrify their lines. At that point the RRs become fuel-agnostic and can run on everything from lignite to sunlight; oil prices cease to matter. For local transport, perhaps something like the Balqon electric drayage tractors could find use. Swappable batteries would keep them working more. That leaves over-the-road trucks, both cross-country and for zones too far from rail terminals for BEVs. Maybe we should be turning trails back to rails and doing other things to minimize the need for them. This idea that economy will stop when gas price hit 5$ / gallon is just plain ridiculous. Economy will adapt, even if electric cars are not ready, people will use more efficient cars, Railway will go electric, people will drive less, CNG will becomes an alternative. It takes more than that to kill an economy, much more

Kelly, I agree that the true cost of gasoline is not reflected in the price we pay at the pump. I think the true price is closer to $6.00 though. But what you are arguing is that we subsidize oil and hide the true cost. So whats your point, that we should have an honest government that doesn't allow itself to favor organizations who make large political contributions or threaten to cause short term economic chaos? What I am saying is that if the price goes up much more, true cost or not, the oil industry will be shooting itself in the foot. Iran may be full of religious fanatics who sometimes think that death and suffering is a good thing, but oil companies are filled with greedy old men who don't want to give up the game that has them on top.$10.00 per gallon, not likely, that would be the end of oil. It may cause a temperary economic downturn, but we would come out of that with permanent solutions to our energy sustainability. I am pretty sure the oil companies are not looking to do that.

Which leads to another point. If we are the richest country on the planet, why do we leave ourselves so exposed to the religious fanatics of places like Iran. I'd say it's because we have become weak minded. Most people are easily led by media outlets that intentionally confuse the issues so as to hide the real events and issues from the ignorant followers. If people actually had the facts, maybe , just maybe, we would make rational decisions. Okay, that's probably a little wishful thinking. It's not likely that we will ever have an educated populace. But one can dream right?

Gas prices went from $3.30/gal to$5.50/gal in our area in the last two years. Not too many people complained for more than a few days. However, the majority is buying much smaller cars and hybrids are off the lot within a few hours. Our good neighbors, South of the Border, could very well have to do the same thing in the next 24 months.

Large 4 x 4 sell at a $17,000 discount and often for less than a small car. Trade in value for a used 4 x 4 is almost zero. Yes, the time has come to selectively electrify rail lines. Converting existing on-board diesel power plant to CNG would make sense in countries (like USA-Canada-Russia etc) with lots of low cost NG. Converting large highway trucks and buses from diesel to CNG is another possibility. The typical Green living in his fantasyland, believes we use more and more fossil fuel. When in reality, the US has been leading the World in reducing fossil usage since the 21st century began, as this report affirms. At the same time leading the world in developng and using cleaner vehicles, that also use less fuel with better combustion through technological advances. The idea that syphoning off the R&D money by high prices generated by taxes, will change anything is mis-proven by the situation in Europe where prices due to taxes have been jacked up past$8.00/gallon. All that happened is that they drive slightly smaller cars, but not any smaller than they used to do, and use much more polluting engine technologies, like primitive un-clean diesels. There is little money available to invest in new technology in production or consumption methods, by those in a position to do so, the fossil producers or the producers of consuming vehicles. hence they get dirtier Air. We know from sad experience, the bureaucrats and politicians will not do so intelligently.

The USA and North America will soon be exporting fossil fuels as it did in the mid 20th century and setting world prices, once again. The day of the monopolistic price setting by kleptocratic governments after nationalizing their oil companies in the Mid-East in the 1970s, has just about run its course.

SP:...your last paragraph may never come true unless Canada could increase fossil fuel production from 3+ to 12+ million barrels/day (not impossible but difficult to do in less than 20+ years) or the majority of our vehicles are electrified (that will also take 20+ to 30+ years).

The days that USA (North America) dictates and sets oil prices are over.

Power is quickly shifting to Asia, at least for the next (many) decades.

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